Friday, October 27, 2017

If that double bottom chart pattern in wheat,
as discussed by Agrimoney 24 hours ago, is indeed to boost prices,
well, its positive tendencies remained in disguise in early deals.

Not that the futures were trading heavily lower in early deals,
shedding just 0.1% to $4.53 ½ a bushel in Chicago for December delivery,
as of 09:40 UK time (03:40 Chicago time).

Signally, they remained – just - above their 10-day moving average,
at $4.35 a bushel, offering some hope against a fresh wave of sales that
headway in the last session encountered.

‘Still find plenty of sellers’

“The market did find a seam of selling at the day’s highs,” said Tobin Gorey at Commonwealth Bank of Australia.

“We expect the market to still find plenty of sellers when prices
rise,” raising a threat to the idea of a double bottom in the chart
indeed proving as bullish as some hope.

US broker Benson Quinn Commodities said that “I am inclined to
believe these markets will stay rangebound and will move lower from the
current levels.

“With the winter wheat’s trading near mid-range, the objectives are
Tuesday’s high [$4.60 ¾ a bushel] on the upside and $4.20 a bushel on
the downside.”

Winter wheat sowings

One intriguing factor is the rising open interest (ie live contracts)
in wheat futures, close to a five-year high, despite what might appear
limited prospects for price moves, with the high stocks a depressant to
values, but with support from the fact that they are already
historically soft.

Indeed, on the most positive aspect for prices,
there are ideas of winter wheat sowings for the 2018 harvest falling in
the US, expectations only boosted by the slow pace of seedings in Plains
hard red winter wheat areas.

Terry Reilly at Futures International said that “there is little
incentive for US producers to expand the winter wheat area given poor
economics and price relationships” with sorghum and corn....MUCH MORE